6 Apr 2021

Research Briefing | Global

Coronavirus Watch: When is the vaccine tipping point?

Economist
 Despite increasing numbers of new coronavirus cases globally, the possibility
that more economies will enjoy both limited domestic restrictions and
Ben May
sustained low new case numbers is growing closer thanks to ongoing
Director of Global Macro vaccination rollouts.
Research
 Indeed, the persistent decline in the number of new cases in Israel, even after
+44(0)20 3910 8015 the reopening of the economy in early March, implies the country has already
reached the tipping point allowing fewer restrictions while maintaining lower
case numbers. However, it is difficult to tell with certainty exactly when the
corner was turned, and the level of immunity needed within the domestic
population.

 Although the UK is rapidly rolling out vaccines and is experiencing a persistent

drop in case numbers, it remains unclear whether mass vaccination or
persistent restrictions are leading the improving health situation. Meanwhile,
the US and Chile have vaccinated a significant share of their populations but
are still recording rising case numbers.

 It is uncertain whether any economies other than Israel have reached the
tipping point where restrictions can be eased while keeping case numbers low.

When examining the course of the pandemic, the focus understandably centres on
coronavirus hotspots where case numbers are high or rising quickly. An overlooked issue
is how many economies have maintained persistently low numbers of cases and whether
this group is swelling or shrinking in size.

The main characteristic of a coronavirus “cold spot” is a consistently low number of new
cases. We consider at least 28 consecutive days of less than five daily positive new cases
per million people to be the cold spot benchmark. There are currently 32 economies that
meet this definition, most of which are in Asia and Africa (Figure 1).

Figure 1: There are Covid-19 coldspots

few economies
where official figures
show consistently
low new coronavirus
cases
We find that only 32
Australasia: Australia, Fiji,
Asia: Afghanistan, Bhutan, New Zealand
Brunei, China, Laos, economies have recorded
Myanmar, Singapore,
Taiwan, Tajikistan, Thailand,
3
fewer than five new cases per
Vietnam, Yemen
12 Americas:
Haiti, Nicaragua
million people for the past 28
2 consecutive days. For many of
these economies, we think the
official figures may paint a
misleading picture of the
underlying health situation.

Africa: Algeria, Angola,

Burkina Faso, Burundi,
15 Central African Republic,
Chad, Democratic
Republic of Congo,
Liberia, Malawi, Niger,
Nigeria, Sierra Leone,
Sudan, Tanzania,
Source : Oxford Economics/Haver Analytics Uganda

Contact: Ben May | bmay@oxfordeconomics.com

Coronavirus Watch: When is the vaccine tipping point?

However, many of these economies are among the poorest Figure 2: The number of “cold spots” is
declining
in the world (Burundi, Democratic Republic of Congo, Haiti),
Covid coldspots
are war torn (Yemen), or have a coronavirus-denying Economies with less than 5 case per million people for 28 days running
government (Tanzania), suggesting that the low official 100
coronavirus statistics may reflect inadequate testing. Cases 90
per million will also be volatile and misleading in economies 80
with tiny populations, such as Fiji. It is therefore likely that 70
there are far fewer true cold spots than official statistics 60
imply. 50
40
Some economies have maintained a low number of cases, 30
albeit at slightly higher levels than the cold spots, such as 20
South Korea. But even if we add these to the list, the group 10
that have successfully contained coronavirus remains small. 0
Jul 20 Sep 20 Nov 20 Jan 21 Mar 21
Source : Oxford Economics/Haver Analytics
What’s more, the number of cold spots has fallen over
time. This suggests it is getting harder, not easier, to keep Figure 3: Emergence from lockdown hasn’t
the virus contained (Figure 2). Indeed, some economies that halted the plunge in Israeli coronavirus cases
had previously been hailed as good examples with respect Israel: Covid-19 cases and severely ill
to coronavirus containment have seen their number of cases Cases per million
Lockdown 2.0
Admissions
Lockdown 3.0
Vaccinations
move higher. For instance, Iceland has seen a rise from less 1100 begin 240
1000 Positive Covid-19 cases (7-day moving 220
than two cases per million at the end of February to 26 now. average, lagged 7 days, LHS)
900 200
800 New seriously ill hospital patients (7-day 180
Approaching a tipping point? 700
moving average, RHS)
160
140
Looking ahead, one possibility is that some economies are 600
120
500
approaching the point where immunity levels have risen to 100
400
the point where it will become easier to keep coronavirus 80
300 60
case numbers contained. 200 40
100 20
The data from Israel remain very encouraging in this 0 0
respect. Since the beginning of March, the number of cases 06 2020 08 2020 10 2020 12 2020 02 2021 04 2021
Source : Oxford Economics/Israeli Ministry of Health
has fallen from over 400 per million to just under 40 per
million. Hospitalisations have plunged too (Figure 3). Over Figure 4: But PMIs provide a poor guide to
the same period, most restrictions have been lifted and monthly changes in activity
there has reportedly been little enforcement of any Israel: Estimated breakdown of vaccinations
remaining rules, suggesting that the drop in the number % of population
60
of cases reflects the effects of the mass vaccination roll- Received one dose, but still too soon
to boost immunity
out, rather than other factors such as tight restrictions. 50
Recevied one dose and likely
benefitting from immunity effects
If vaccinations are the reason for the drop in case, the key 40 Received two doses

question is when did Israel reach the tipping point and what
30
level of immunity within the population was needed?
20
Figure 3 shows the number of cases peaked in mid-
January, but the initial decline in case numbers most likely 10

reflects the imposition of a new lockdown at the end of

0
December and a further tightening in January. Restrictions 19 Dec 02 Jan 16 Jan 30 Jan 13 Feb 27 Feb 13 Mar 27 Mar
were relaxed from February 7, but given the still Source : Oxford Economics/Israel Ministry of Health

exceptionally high number of cases and the modest initial

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Coronavirus Watch: When is the vaccine tipping point?

relaxation, the further reduction in case numbers may have Figure 5: Experience of Israel suggests some
economies may be near the turning point…
continued to mainly reflect lockdown conditions. Since
Vaccination rollout
March 7, restrictions have eased substantially and case
Share of the population that have recieved at least one dose of vaccine
numbers have continued to drop, perhaps suggesting that 50 March 23 April 5
vaccinations played a key role in this drop off in cases. 45
40 Possible threshold
A broad but reasonable timeframe in which the vaccine for a turning point
35 based on Israel data
roll-out tipped the balance for Israel might be between 30
February 7 and March 7. At the start of this period, Israel 25
had delivered 65 doses per 100 people, and by the end of 20
the period the number of doses had surged to 101 per 100 15
people. Over this period, the population with at least partial 10
immunity from the Pfizer jab increased from around 28% to 5
47%, as demonstrated by the shaded area in Figure 4). 0
UK Chile US
Overall immunity rates will have been higher when those Source : Oxford Economics/Haver Analytics
with immunity from prior infection are also factored in.
Figure 6: … but new case numbers suggest
Estimates typically suggest that 60%-70% of the population caution is necessary
may need to have immunity to achieve herd immunity. New Covid-19 cases
However, Israel’s experience suggests lower vaccination Cases per million people (7-day moving average)
1000
rates than this might still yield observable health gains. But Chile
900 United Arab Emirates
the exact threshold is likely to vary from region to region due United States
800 United Kingdom
to factors such as the type of vaccine used, community
700
immunity levels from past infections, and the presence of
600
coronavirus variants.
500
400
The only large economies that have administered at least
300
one dose of a vaccine to 28% or more of the population (our
200
estimated lower threshold from Israel) are the US (32%), the
100
UK (46%), Chile (36%) and the UAE (figure not available).
0
However, not all of those vaccinated will already have full Mar 20 Jun 20 Sep 20 Dec 20 Mar 21
immunity, as using vaccine take up with a 14-day lag may Source : Oxford Economics/Haver Analytics

provide a better gauge of current immunity (Figure 5).

Of the four large economies stated above, three have seen

cases level off or pick up (Figure 6). Chile has been forced
to reimpose restrictions due to a surge in case numbers. The
pick-up has been blamed on individuals dropping their guard
and on the spread of new coronavirus mutations, such as
the P.1 (Brazil) variant. The exception is the UK, where just
over 50% of the population are estimated to have
coronavirus antibodies as of the middle of March, which has
maintained the downward trend in new cases. The true test
for the UK will be the extent to which case numbers rise
in response to the recent relaxation of restrictions.

While an increasing number of economies may be edging

towards becoming coronavirus cold spots via vaccination, it
remains far from clear whether anyone, with the probable
exception of Israel, has reached that point just yet.

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Coronavirus Watch: When is the vaccine tipping point?

Appendix
Figure 8 Figure 9
World: New Covid cases
Thousands (7-day moving average)
800

700

600

500

400

300

200

100

0
Mar 20 May 20 Jul 20 Sep 20 Nov 20 Jan 21 Mar 21
Source : Oxford Economics/Haver Analytics

Figure 10 Figure 11

Figure 12 Figure 13

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Coronavirus Watch: When is the vaccine tipping point?

Figure 14 Figure 15

Figure 16 Figure 17

Figure 18 Figure 19

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Coronavirus Watch: When is the vaccine tipping point?

Figure 20 Figure 21

Figure 22 Figure 23

Figure 24 Figure 25

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Coronavirus Watch: When is the vaccine tipping point?

Coronavirus Economic & Financial Impacts

Indicator January February March April May June July August September October November December January February March

Outbreak metrics (End period)

Confirmed coronavirus cases - global weekly change
Confirmed coronavirus deaths - global weekly change
China activity indicators
Coal consumption for electricity use (relative to a year ago and adjusted for CNY)
Steel furnacing operating rate (relative to a year ago and adjusted for CNY)
Urban road congestion (relative to a year ago and adjusted for CNY)
Residential property sales (relative to a year ago and adjusted for CNY)
US activity indicators
Unemployment insurance, intial claims (Thousands)
Raw steel production (relative to a year ago)
Hotel occupancy rates
China (Relative to a year ago)
Asia Pacific excluding China (Relative to a year ago)
Europe (Relative to a year ago)
US (Relative to a year ago)
Global supply chains & lockdowns
G20 lockdown stringency index (0 -100)
National school & university closures (Millions of students affected)
G20* Apple Mobility Data - Driving directions requests (13-19 Jan = 100)
G20* Apple Mobility Data - Transit directions requests (13-19 Jan = 100)
G20* Apple Mobility Data - Walking directions requests (13-19 Jan = 100)
G20* Google Mobility Data - Residential activity v median (Jan 3 - Feb 6)
G20* Google Mobility Data - Parks activity v median (Jan 3 - Feb 6)
G20* Google Mobility Data - Groceries & pharmacies activity v median (Jan 3 - Feb 6)
G20* Google Mobility Data - Workplace activity v median (Jan 3 - Feb 6)
G20* Google Mobility Data - Retail & recreation activity v median (Jan 3 - Feb 6)
G20* Google Mobility Data - Transit activity v median (Jan 3 - Feb 6)
Flightradar24: Average number of flights (13-19 Jan =100)
Baltic Dry Index (% difference from pre-coronavirus outbreak)
Maersk stock price (% difference from pre-coronavirus outbreak)
Financial markets data
S&P 500 (% difference from pre-coronavirus outbreak)
EuroStoxx 50 (% difference from pre-coronavirus outbreak)
Shangai SEE (% difference from pre-coronavirus outbreak)
US 10-year Treasury yield (%)
German ten-year government bond yields (%)
Italian 10-year government bond spread (bps)
US Bloomberg Barclays High Yield OAS (bps)
US Bloomberg Barclays Investment Grade OAS (bps)
VIX
Commodity price: Brent Oil ($ per barrel)
Citigroup economic surprise index
* Subject to data being available
Source: Oxford Economics / Apple / Blavatnik School of Government / Datastream / Flightradar24 / Google / Haver Analytics / STR / UNESCO / WIND

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